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NEWTON, Mass., May 30, 2024--(BUSINESS WIRE)--Diversified Healthcare Trust (Nasdaq: DHC) today announced that it closed a $120 million mortgage loan secured by eight properties within DHC’s Medical Office and Life Science Portfolio, located in seven states and consisting of approximately 725,000 square feet. As of March 31, 2024, the weighted average remaining lease term for these properties was 5.4 years and the occupancy rate was 93%. The non-recourse loan has an implied capitalization rate of 7.2% based on the aggregate appraised value for the collateral properties and a loan to value ratio of approximately 50%.
The loan is an interest only 10-year mortgage with a 6.864% all-in fixed interest rate. DHC intends to use approximately 50% of the loan proceeds to redeem a portion of its outstanding 9.750% senior notes due 2025. DHC will use the remainder of the loan proceeds to fund capital investments and improve liquidity.
Matt Brown, Chief Financial Officer and Treasurer of DHC, made the following statement.
"Today’s announced financing is the first step in executing on our broader financing strategy to lower financing costs, improve weighted average remaining debt term and enhance our liquidity profile."
The lenders were Wells Fargo Bank, National Association, Bank of Montreal and UBS AG.
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever DHC uses words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", "will", "may" and negatives or derivatives of these or similar expressions, DHC is making forward-looking statements. These forward-looking statements are based upon DHC’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. DHC currently intends to use approximately 50% of the loan proceeds to redeem a portion of its outstanding 9.75% senior notes due 2025; however, the redemption may not occur or may be delayed. Further, Mr. Brown’s statement regarding DHC’s financing strategy may imply that DHC will be able to sustain and improve its liquidity; however, DHC may not be able to execute on its financing strategies or have sufficient liquidity available to fund its capital needs. Actual results may differ materially from those contained in or implied by DHC’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond DHC’s control.